Stock market closes in red as West Asia conflict and US retail sales data weigh on investor sentiments

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MUMBAI: The stock market faced a challenging trading day on Thursday as indices opened in the red and struggled to gain upward momentum but could not make it to the green territory.

The Sensex concluded the day 247.78 points lower, closing at 65,629.24, while the Nifty ended 58.95 points down, closing at 19,624. Among the Nifty companies, 17 saw advances, while 33 recorded declines.

The top gainers among the Nifty firms included Bajaj Auto, LITMindtree, Hero Motocorp, Nestle India, and Ultra Cement. Conversely, Wipro, Tech Mahindra, Sun Pharma, NTPC, and UPL were the top losers during the market’s opening hours.

Varun Aggarwal, founder and managing director, Profit Idea, said, “Domestic equities witnessed selling pressure amidst intensifying conflict in the Middle East and worries of a prolonged high-interest rate regime after a better-than-expected US retail sales data. Going ahead, the market may witness pressure in near term as the commodity prices of Brent crude and gold surged to 1-month high while US 10-Year bond yield spiked to 16-year to above 4.8 per cent. Investor sentiments would be subdued till the tension between Israel-Gaza subsides. But we expect stock specific actions to continue as more results get declared”.

The stock market’s bearish performance can be attributed to several factors. The escalating conflict in the Middle East, coupled with concerns about a prolonged high-interest rate environment following better-than-expected US retail sales data, created selling pressure in domestic equities.

Investors remain cautious as commodity prices for Brent crude and gold surged to a one-month high. Additionally, US 10-year bond yields jumped to levels not seen in 16 years, surpassing 4.8 per cent.

The ongoing tension between Israel and Gaza continues to weigh on investor sentiment, likely resulting in subdued market conditions. However, individual stocks may see continued action as more corporate earnings reports are released.

“Nifty formed a Bearish candle on a daily frame and negated its higher lows formation of the last two sessions. Now till it holds below 19700 zones, weakness could be seen towards 19550 then 19450 zones whereas hurdles are placed at 19750 then 19850 zones. OI data has strong put writing at 19500 levels. Broader market continues to remain bullish. The focus remains on defined risk strategies on IT, Pharma, Metal, Media, Banking sector. Medium term outlook remains bullish despite issues and global tensions”, said Aggarwal.

On the technical front, the Nifty formed a bearish candle on the daily chart, breaking the pattern of higher lows observed in the last two sessions.

To maintain a positive outlook, the Nifty needs to hold above 19,700 levels. If it fails to do so, the index could see weakness towards 19,550 and 19,450 zones. On the upside, hurdles exist at 19,750 and 19,850 levels.

Option interest (OI) data indicates strong put writing at 19,500 levels, signalling a possible defence of that level by bulls. Despite prevailing issues and global tensions, the broader market remains bullish, with a focus on defined risk strategies in sectors like IT, Pharma, Metal, Media, and Banking.

The medium-term outlook for the market remains optimistic, driven by specific stock actions and ongoing corporate results. (ANI)

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